Marumae's (TYO:6264) wholly-owned subsidiary, KMX, is borrowing funds totaling 9.7 billion yen to acquire shares in KM Aluminium, according to a bourse filing last Friday.

The borrowing consists of two term loans amounting to 4.85 billion yen each provided by The Kagoshima Bank. The lender also agreed to a 600 million yen credit facility for KM Aluminium's operating capital.

The loans are scheduled to be drawn on April 8, with a final repayment date set for the end of January 2032. The interest rate will be based on a base rate plus a spread.

The acquisition of KM Aluminium aligns with Marumae's long-term vision of driving innovation through advanced technology and achieving its 2030 targets of 30 billion yen in sales and 9 billion yen in operating profit.

By opting for borrowing instead of issuing new shares, the company aims to take advantage of the current low share price and stabilize cash flow by deferring part of the repayment for seven years.

The Kagoshima Bank will underwrite the entire amount, with other financial institutions invited to join a syndicate.